Carrying out self employed work after MVL?

[jamesbrown]

From your comments I'd also agree with your accountant. However, it's because you're suggesting the volume of work will be trivial in comparison. It's not because you'll be doing it as a sole trader. Lance's example is the one I was thinking of.

Agree with this.

[jamesbrown]

It is quite vague, but the example HMRC provide implies that you'll be fine as a sole trader.

Completely disagree. The TAAR condition C is very clear that you cannot carry on, or be involved with, the same or a similar trade or activity (my emphasis). The word activity is what causes confusion, but the word trade is extremely clear and unambiguous. Self employment in the same area with the same clients is clearly carrying on the same trade. However, in this instance, the amount will be trivial and the OP will be fine on that basis alone. But if it ends up being not trivial, that will be a problem...

[n1234]

Thanks for the clarification! Good to know that I won’t have to necessarily leave clients high and dry if I do go down this route.

The two clients are very small companies run by friends so there’s no worries about whether they’d work with self employed I don’t think, but that’s a great point in general.

[northernladuk]

Just be aware that agents won't work with self employed so it's quite possible some clients may say the same.

[Maslins]

From your comments I'd also agree with your accountant. However, it's because you're suggesting the volume of work will be trivial in comparison. It's not because you'll be doing it as a sole trader. Lance's example is the one I was thinking of.

[n1234]

That’s a helpful link, thank you!

Sounds from that like you could argue that condition D is also not met in my case, because the amount of money involved is much smaller than when the limited company was active, and it’s just maintaining work that was previously done rather than seeking out new business, and I’d be paying full tax on the income.

[Lance]

I’m considering a move to a perm role and so at some point may look to dissolve my limited company via MVL. I’d intend to wait a while to be sure I was happy in the new role, as I’ve heard of people doing this then realising they want to go back contracting and not being able to as a Ltd. because of the two year rule.

One thing I am unclear on is whether one could carry out small amounts of work declared as self employed income on your tax return after dissolving a limited company in the same trade. The specific situation I am thinking of is small amounts of maintenance work for existing clients - not a large enough amount to justify the costs of running a limited company.

My accountant believes self employed work should be okay as the two year rule is specifically to do with the tax advantages of running a Ltd company, but I’ve read a couple of things on here suggesting that people believe otherwise.

Would be interested to get any thoughts/experience - feels like one of those situations where the wording is vague and it’s hard to know for sure. At the end of the day it’s not a dealbreaker and if push came to shove, the clients would need to find someone else to do maintenance work, but it would be nice to be able to support them still.

I agree with your accountant.
Read example 2 here CTM36325 - Company Taxation Manual - HMRC internal manual - GOV.UK (www.gov.uk)

It is quite vague, but the example HMRC provide implies that you'll be fine as a sole trader.

[n1234]

I’m considering a move to a perm role and so at some point may look to dissolve my limited company via MVL. I’d intend to wait a while to be sure I was happy in the new role, as I’ve heard of people doing this then realising they want to go back contracting and not being able to as a Ltd. because of the two year rule.

One thing I am unclear on is whether one could carry out small amounts of work declared as self employed income on your tax return after dissolving a limited company in the same trade. The specific situation I am thinking of is small amounts of maintenance work for existing clients - not a large enough amount to justify the costs of running a limited company.

My accountant believes self employed work should be okay as the two year rule is specifically to do with the tax advantages of running a Ltd company, but I’ve read a couple of things on here suggesting that people believe otherwise.

Would be interested to get any thoughts/experience - feels like one of those situations where the wording is vague and it’s hard to know for sure. At the end of the day it’s not a dealbreaker and if push came to shove, the clients would need to find someone else to do maintenance work, but it would be nice to be able to support them still.